MANILA, Philippines – (UPDATED) The Philippines export performance in November 2014 hit a record high of 19.7%, outperforming again the People’s Republic of China.
The world’s second largest economy hit only 4.7% for the same period in 2014, the National Economic and Development Authority (NEDA) reported on Friday, January 9.
In September 2014, the country’s merchandise exports growth was 15.7%, versus China’s 15.3%.
To date, the Philippines’ export performance was at its most sluggish in October at 2.9%. But for the third time in 2014, Philippine merchandise exports was the highest among other economies in East and Southeast Asia.
In November, the Philippines also outperformed Vietnam (10.8%); Taiwan (3.7%); Hong Kong (2.8%); Thailand (-1.0%); Republic of Korea (-2.1%); Malaysia (-2.3%); Singapore (-6.4%); Japan (-10.0%); and Indonesia (-14.6%).
NEDA Deputy Director-General Emmanuel F. Esguerra said the strong performance for the period was largely driven by growth in manufactures, agro-based, and mineral products.
“An increased demand for Philippine-made products by Taiwan, China, and the United States of America (USA) likewise boosted this expansion,” Esguerra said.
Philippine exports grew to $5.2 billion from $4.3 billion in November 2013.
For the first 11 months of 2014, total exports rose by 10% to $56.9 billion from $51.7 billion in a comparable period in 2013.
Japan remains the top destination of Philippine exports with a total value of $1.1 billion or 21.1% of total revenues from merchandise exports during the period.
The US came in second with total sales receipts of $689.4 million or a 13.3% share, and China with 12.4 %.
The 2014 full-year export growth is expected to be in the 7% to 11% range, Dan Lachica, president of the Semiconductors and Electronics Industries in the Philippines Inc. (SEIPI) said.
Higher growth path
NEDA noted that manufactures continued to gain from positive developments in the global manufacturing sector, with both electronics and non-electronics segments pushing exports to a higher growth path.
Manufactured goods export earnings reached $ 4.4 billion, up from $3.7 billion registered in November 2013.
Total sales receipts from electronic products reached $2.5 billion in November 2014, higher by a hefty 27% compared to $2 billion in the same period for 2013.
For 2014, the industry is also looking at a total electronic exports between $23.3 billion to $24.2 billion.
The momentum is expected to continue to 2015 albeit at a modest single-digit growth projection of 5% to 7%, Lachica said.
Total agro-based products also managed to sustain robust growth in November 2014, with their exports value reaching $354.3 million, or up by 34.5% from $263.5 million in November 2013.
Coconut oil exports also doubled the export earnings from coconut products to $180 million from November 2013’s $68.6 million.
Revenues from mineral products also grew by 5.6% to US$195.9 million in November 2014 from US$185.5 million in November 2013 due to increased shipments of copper metal.
The strong performance of these sectors moderated the lower export revenues registered by petroleum and forest products.
The Volume of Production Index (VoPI) and Value of Production Index (VaPI) showed an increase in November, growing by 8.1% and 7.5%, respectively, owing to a sustained broad-based growth in the manufacturing sector. This is according to the Philippine Statistics Authority’s (PSA) Monthly Integrated Survey of Selected Industries (MISSI) report for that period.
Highest growth rates, in terms of volume and value, were recorded by printing, fabricated metal products, and beverages.
Increased consumption demand
Apart from robust export demand, the manufacturing sector’s higher growth for the period is attributed to increased domestic consumption, as well as improvement in the deliveries of goods, NEDA said.
NEDA added that with strong local consumption bolstered by the inflow of Overseas Filipino Workers’ remittances, as well as higher income from the holiday season, the sector is expected to display a higher growth in the 4th quarter of 2014.
“The demand during the holiday season likely sustained exports and consumption growth until December 2014 which could potentially support a stronger 4th quarter gross domestic product (GDP) growth,” Esguerra said.
But the slack demand by the start of 2015 may soften prospects for Philippine exports, add to that the uncertainties still lingering in many big economies.
Considering that exports of goods comprise about 40.7% of the country’s GDP, vulnerability to external shocks through the trade channel can pose downward risk to growth, Esguerra cautioned.
To mitigate the risks, the government should intensify efforts in further diversifying export products and markets through continued export promotion and market access initiatives, Esguerra said.
Esguerra added that the enhancement of the Export Assistance Network (EXPONET) can help provide start-up support for more exporters and further ease export-related procedures.
Adequate and appropriate infrastructure, including a facilitative regulatory environment, are vital for the manufacturing sector. As such, the effective implementation of the Manufacturing Resurgence Program and faster implementation of infrastructure projects, including those under public-private partnerships (PPP), are essential, Esguerra noted.
“Upgrading our national quality infrastructure to be at par with international standards will not only improve the quality of our products but also open up more markets for our country’s exports,” Esguerra said.
The government’s expenditure program also needs to regain traction to restore a vital policy lever to stabilize the economy, should external risks materialize, Esguerra added. – Rappler.com